[Cite as McCulloch v. Janney Montgomery Scott L.L.C., 2014-Ohio-4002.]

STATE OF OHIO, COLUMBIANA COUNTY 

IN THE COURT OF APPEALS 

SEVENTH DISTRICT 

ROBERT McCULLOCH, III, et al., ) 

) CASE NO. 13 CO 40 

PLAINTIFFS-APPELLANTS, ) 

) 

VS. ) O P I N I O N 

) 

JANNEY MONTGOMERY SCOTT LLC, ) 

) 

DEFENDANT-APPELLEE. ) 

CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas Court, 

Case No. 12CV778. 

JUDGMENT: Affirmed. 

JUDGES: 

Hon. Joseph J. Vukovich 

Hon. Gene Donofrio 

Hon. Mary DeGenaro 

Dated: September 8, 2014
[Cite as McCulloch v. Janney Montgomery Scott L.L.C., 2014-Ohio-4002.]

APPEARANCES: 

For Plaintiffs-Appellants: Attorney Michael McGee 

 107 Main Avenue, Suite 500 

 Warren, Ohio 44481 

 Attorney Anthony Paduano, Pro Hac Vice 

 1251 Avenue of the Americas, Ninth Floor 

 New York, New York 10025 

For Defendant-Appellee: Attorney Jerry Santangelo, Pro Hac Vice 

 Attorney Brody Weichbrodt, Pro Hac Vice 

 Two North LaSalle Street, Suite 1700 

 Chicago, Illinois 60602 

 Attorney Joseph Simms 

 1660 West 2nd Street, Suite 1100 

 Cleveland, Ohio 44113-1448 
[Cite as McCulloch v. Janney Montgomery Scott L.L.C., 2014-Ohio-4002.]

VUKOVICH, J. 

{¶1} Plaintiffs-appellants Robert McCulloch, III and Hunter Associates Inc., 

appeal the decision of the Columbiana County Common Pleas Court denying its 

motion to vacate the arbitration award and confirming the arbitration award in 

defendant-appellee Janney Montgomery Scott LLC’s favor. Three issues are raised 

in this appeal. The first is whether the cause is moot. The second is whether, in 

addition to the standard of review espoused in R.C. 2711.10 to use in determining 

whether an arbitration award is required to be vacated, does Ohio also recognize the 

“manifest disregard of the law” standard? The third issue is, applying the correct 

standard of review, did the panel of arbitrators overstep their authority by issuing an 

award for Montgomery Scott? 

{¶2} For the reasons expressed below, the judgment of the trial court to 

deny the motion to vacate the arbitration award is hereby affirmed. We hold that the 

cause is not moot, and that regardless of what standard is employed, the arbitrators 

did not exceed their authority in issuing the award. 

Statement of Facts and Case

{¶3} In the early 1980s McCulloch opened a financial broker/advisor firm in 

Salem, Columbiana County, Ohio, that was affiliated with Parker/Hunter Inc. In 2005, 

that firm branch was purchased by Montgomery Scott for $5 million. McCulloch and 

his team continued to work for Montgomery Scott; McCulloch was Montgomery 

Scott’s most senior corporate officer at the Salem branch. The record does indicate 

that McCulloch did not like some of Montgomery Scott’s policies and believed that 

those negatively affected the service he could provide for his clients. The record also 

indicated that McCulloch did voice these concerns to Montgomery Scott’s corporate 

office. 

{¶4} On April 8, 2011, McCulloch and most of his management team at 

Montgomery Scott resigned, walked down the street and began working for Hunter 

Associates, taking with them a lot of McCulloch’s clients. Allegedly, this group 

departure eventually caused Montgomery Scott to close its office in Salem. 
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{¶5} In May 2011, Montgomery Scott initiated arbitration through FINRA 

(Financial Industry Regulatory Authority). Montgomery Scott alleged raiding/unfair 

competition against Hunter Associates; breach of fiduciary duty against McCulloch; 

tortious inducement of breaches of fiduciary duty against Hunter Associates; civil 

conspiracy against both McCulloch and Hunter Associates; and tortious interference 

with actual and prospective business relationship against Hunter Associates. 

McCulloch and Hunter Associates answered and filed a counterclaim. 

{¶6} The arbitration hearing lasted 13 days over a span of five months. On 

November 8, 2012, the arbitrators issued their decision finding McCulloch and Hunter 

Associates jointly and severally liable for compensatory damages in the amount of 

$2.4 million plus post-judgment interest. The award does not set forth reasoning. 

McCulloch and Hunter Associates’ counterclaim was denied and dismissed. 

{¶7} On December 9, 2012, Hunter Associates paid the $2.4 million 

judgment. However, they failed to pay the interest, which was $12,000. 

{¶8} On December 10, 2012, McCulloch and Hunter Associates filed a 

complaint in the Columbiana County Common Pleas Court seeking to have the 

arbitration award vacated under R.C. 2711.10(D). Montgomery Scott filed an answer 

and cross motion for confirmation of the award. 

{¶9} The trial court denied the motion to vacate the arbitration award and 

confirmed the award. It entered judgment in Montgomery Scott’s favor and ordered 

Hunter Associates and/or McCulloch to pay the remaining $12,000 of the judgment 

plus interest at a rate of 6% from November 9, 2012 until the $12,000 is paid in full. 

{¶10} This timely appeal follows, in which McCulloch and Hunter Associates 

assert three assignments of error. However, prior to addressing the merits of 

McCulloch and Hunter Associates’ appellate brief, we must first address Montgomery 

Scott’s assertion that the case is moot because McCulloch and Hunter Associates 

paid the principal amount of the award. 

Moot

{¶11} Montgomery Scott argues that the case is moot because prior to filing 

the motion to vacate the award in the Columbiana County Common Pleas Court, 
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Hunter Associates paid the $2.4 million award. Hunter Associates, however, did not 

pay the $12,000 interest award. 

{¶12} There is case law that the satisfaction of a judgment renders an appeal 

from a judgment moot. Blodgett v. Blodgett, 49 Ohio St.3d 243, 245, 551 N.E.2d 

1249 (1990); see also Wiest v. Wiegele, 170 Ohio App.3d 700, 2006–Ohio–5348, 

868 N.E.2d 1040, ¶ 12 (1st Dist.); Art's Rental Equip., Inc. v. Bear Creek Constr., 

LLC, 1st Dist. Nos. C–110544, C–110555, C–110558, C–110559, C–110564, C–

110785, C–110792, C–110797, C–110798, C–110799, C–110800, C–110801, C–

110808, and C–120309, 2012–Ohio–5371, ¶ 7. Absent a fraud upon the court, 

where a judgment has been voluntarily paid and satisfied, that payment puts an end 

to the controversy. It takes away “the right to appeal or prosecute error or even to 

move for vacation of judgment.” Blodgett at 245, quoting Rauch v. Noble, 169 Ohio 

St. 314, 316, 159 N.E.2d 451 (1959). 

{¶13} Hunter Associates and McCulloch claim that the matter is not moot. It 

contends that the arbitration award is not a judgment; the award does not reach the 

status of a judgment until the award is confirmed by a common pleas court. It also 

argues that the award has not been fully satisfied and that they were required by 

FINRA rules to pay the matter within 30 days of the award or face sanctions. 

{¶14} We do not need to render a holding on whether there is a distinction 

between an arbitration award and a judgment. At this point in the proceedings, the 

award has been confirmed and clearly is a judgment. Thus, the argument that an 

arbitration award is not a judgment provides no basis for this court to find that the 

cause is not moot. 

{¶15} That said, the judgment to this point has only been partially paid; the 

interest is still due. McCulloch and Hunter Associates claimed that they were 

required to pay the award or they would face sanctions. FINRA Rule 13904 requires 

awards to be paid within 30 days “unless a motion to vacate has been filed with a 

court of competent jurisdiction.” At oral argument, McCulloch and Hunter Associates 

explained that there are financial requirements by FINRA for operation and given the 

size of the award, the only way they could keeping operating the business was to pay 
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the principal amount of the award. Considering the reason why the principal amount 

of the judgment was paid and the fact that the judgment has not been fully satisfied, 

we hold that the matter is not moot. 

Third Assignment of Error

{¶16} “The trial court erred by failing to apply the appropriate standard of 

review.” 

{¶17} The grounds for vacatur, as argued to the common pleas court, were 

that the arbitrators exceeded their authority, and that they manifestly disregarded the 

law. The trial court held that the arbitrators did not exceed their authority; the court 

did not apply the manifest disregard of the law standard. Appellants argue that the 

trial court erred when it did not apply the manifest disregard of the law standard. 

{¶18} The grounds for vacation of an arbitration award are set forth in R.C. 

2711.10, which provides: 

 In any of the following cases, the court of common pleas shall 

make an order vacating the award upon the application of any party to 

the arbitration if: 

 (A) The award was procured by corruption, fraud, or undue 

means. 

 (B) There was evident partiality or corruption on the part of the 

arbitrators, or any of them. 

 (C) The arbitrators were guilty of misconduct in refusing to 

postpone the hearing, upon sufficient cause shown, or in refusing to 

hear evidence pertinent and material to the controversy; or of any other 

misbehavior by which the rights of any party have been prejudiced. 

 (D) The arbitrators exceeded their powers, or so imperfectly 

executed them that a mutual, final, and definite award upon the subject 

matter submitted was not made. 

 If an award is vacated and the time within which the agreement 

required the award to be made has not expired, the court may direct a 

rehearing by the arbitrators. 
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R.C. 2711.10. 

{¶19} These standards, however, are not the only ones used by courts in 

determining whether to vacate or confirm an arbitration award. The Federal Sixth 

Circuit Court of Appeals has recognized the manifest disregard of law standard. 

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir.1995). 

That court explained that the manifest disregard of the law standard is an alternative 

to the statutory grounds and is a judicially created basis for vacation. Id. It then went 

on to explain that this judicially created standard of review is very narrow. Id. “A 

mere error in interpretation or application of the law is insufficient. [Anaconda Co. v. 

District Lodge No. 27, 693 F.2d 35 (6th Cir.1982). Anaconda [Co. v. District Lodge 

No. 27], 693 F.2d [350, 37-38 [(6th Cir.1982)]. Rather, the decision must fly in the 

face of clearly established legal precedent. When faced with questions of law, an 

arbitration panel does not act in manifest disregard of the law unless (1) the 

applicable legal principle is clearly defined and not subject to reasonable debate; and 

(2) the arbitrators refused to heed that legal principle.” Id. 

{¶20} Jaros cited the United States Supreme Court decision in Wilko v. Swan,

346 U.S. 427, 74 S.Ct. 182 (1953), for the creation of the manifest disregard of law 

standard. In Wilko, the Court makes a statement that, “the interpretations of the law 

by the arbitrators in contrast to manifest disregard are not subject, in the federal 

courts, to judicial review for error in interpretation.” Id. at 436-437. 

{¶21} That said, Wilko is a 1953 decision and has been overruled by the 

United States Supreme Court in Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 

U.S. 477 (1989). Rodriguez does not discuss the manifest disregard of the law 

standard, but it does discuss at length the Wilko decision. The Court explains that 

Wilko was decided incorrectly and in an era of “judicial hostility to arbitration.” Id. at 

480-481. “To the extent that Wilko rested on suspicion of arbitration as a method of 

weakening the protections afforded in the substantive law to would-be complainants, 

it has fallen far out of step with our current strong endorsement of the federal statutes 

favoring this method of resolving disputes.” Id.
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{¶22} Furthermore, to the extent that the Wilko decision discusses the 

manifest disregard standard, it does so in the context of federal courts and the 

federal arbitration act. While the federal courts may have expanded the review of 

arbitration awards through case law, it is not clear that the Ohio Supreme Court has 

done so. 

{¶23} The Eighth Appellate District has reviewed the manifest disregard of the 

law standard and has taken the position that the Ohio Supreme Court has not 

expanded the review of arbitration awards. Accordingly, our sister district has 

outrightly rejected the manifest disregard of the law standard. Assn. of Cleveland 

Fire Fighters, Local 93 of Internatl. Assn. of Fire Fighters v. Cleveland, 8th Dist. No. 

94361, 2010-Ohio-5597, ¶ 11; Cleveland v. Internatl. Bhd. of Elec. Workers Local 38,

8th Dist. No. 92982, 2009–Ohio–6223, at ¶ 18–23. In doing so, it has explained that 

the manifest disregard of the law standard was judicially introduced in the Wilko

decision and that the Sixth Circuit Court of Appeals has interpreted what that 

standard is and how it is applied. Internatl. Bhd. of Elec. Workers Local 38, ¶ 17-18.

The Eighth Appellate District acknowledged that some federal courts have expanded 

the scope of review for arbitration awards to include a public policy exception, but it 

rejected the application of that exception to Ohio law because “the Ohio State 

Supreme Court has refused to expand state court review beyond the clear terms of 

R.C. 2711.10.” Id. at ¶ 21. The basis for the rejection was the Ohio Supreme Court’s 

decision in Warren Edn. Assn. v. Warren City Bd. of Edn., 18 Ohio St.3d 170, 480 

N.E.2d 456 (1985). Id. at ¶ 20, 22-23. In that case, the Court stated, “[T]he vacation, 

modification or correction of an award may only be made on the grounds listed in 

R.C. 2711.10 and 2711.11 * * *. The jurisdiction of the courts to review arbitration 

awards is thus statutorily restricted; it is narrow and it is limited.” Id. at 173. 

(Emphasis Added). 

{¶24} That said, it is acknowledged that the Ninth Appellate District has used 

the manifest disregard of the law standard. Automated Tracking Sys., Inc. v. Great 

Am. Ins. Co., 130 Ohio App.3d 238, 246, 719 N.E.2d 1036 (9th Dist.1998) (assuming 

arguendo analysis); Bennett v. Sunnywood Land Dev., Inc., Ohio 9th Dist. No. 
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06CA0089-M, 2007-Ohio-2154, ¶ 42 (appellant failed to demonstrate how the 

evidence that was omitted would establish manifest disregard of the law). 

{¶25} Considering the above, there is support for the position that the 

manifest disregard of law standard is applicable in Ohio. There is also support for the 

position that the only means to vacate an award are set forth in R.C. 2711.10 and 

that the manifest disregard of the law is not applicable. This case, however, does not 

present us with a situation where we must decide if the manifest disregard of the law 

standard is the applicable standard for vacatur in Ohio. As is explained below, under 

either standard the result is the same, the arbitrators’ act did not commit error. 

First Assignment of Error

{¶26} “The trial court erred in affirming the award notwithstanding that there is 

no cause of action for ‘raiding’ under Ohio law.” 

{¶27} Appellate review of an arbitration award is confined to an evaluation of 

the judicial order confirming, modifying, or vacating the award; the substantive merits 

of the award are not reviewable. Handel's Ent., Inc. v. Wood, 7th Dist. No. 04MA238, 

2005-Ohio-6922, ¶ 17. Thus, judicial review of an arbitration award is very narrow. 

Id. at ¶ 18. 

{¶28} This assignment of error discusses the four claims asserted against 

McCulloch and Hunter Associates and argues why the arbitrators allegedly could not 

have found in Montgomery Scott’s favor. Those four claims are raiding/unfair 

competition against Hunter Associates; breach of fiduciary duty against McCulloch; 

tortious inducement of breaches of fiduciary duty against Hunter Associates; and civil 

conspiracy against both McCulloch and Hunter Associates. Appellants assert that 

neither a raiding or tortious inducement of breach of fiduciary in the employeremployee context are cognizable causes of action in Ohio. As to the breach of 

fiduciary duty claim, appellants assert that Montgomery Scott did not prove this cause 

of action, and even if it did, the arbitrators could not hold Hunter Associates jointly 

and severally liable because the claim was only asserted against McCulloch. As to 

the civil conspiracy claim, appellants assert that the claim failed as a matter of law 

because it requires an unlawful act independent from the actual conspiracy. 
-8-

According to Hunter Associates and McCulloch, raiding and/or tortious inducement of 

breach of fiduciary duty in the employment context could not be the independent 

act(s), because those causes of action do not exist under Ohio law. 

{¶29} Ohio courts have continually recognized that Ohio has a strong public 

policy that favors arbitration of disputes. Hogan v. Hogan, 12th Dist. No. CA2007-12-

137, 2008-Ohio-6571, ¶ 14. Once a matter is arbitrated, “the only way to give effect 

to the purposes of the arbitration system of conflict resolution is to give lasting effect 

to the decisions rendered by an arbitrator whenever that is possible.” City of 

Hillsboro v. Fraternal Order of Police, Ohio Labor Council, Inc. (1990), 52 Ohio St.3d 

174, 176, 556 N.E.2d 1186. The purpose of this lasting effect is to honor the parties' 

decision to circumvent the traditional court-based litigation process. Hogan at ¶ 15. 

“If parties cannot rely on the arbitrator's decision (if a court may overrule that decision 

because it perceives factual or legal error in the decision), the parties have lost the 

benefit of their bargain. Arbitration, which is intended to avoid litigation, would 

instead become merely a system of ‘junior varsity trial courts' offering the losing party 

de novo review.” Midwest Curtainwalls, Inc. v. Pinnacle 701, LLC, 8th Dist. No. 

90591, 2008-Ohio-5134 ¶ 7. 

{¶30} The arbitrators’ authority is derived from the parties’ agreement to 

arbitrate the dispute and is defined and rooted in the arbitration agreement. Piqua v. 

Fraternal Order of Police, 185 Ohio App.3d 496 (2nd Dist.2009), ¶ 21. In collective 

bargaining agreement cases, it is the collective bargaining agreement that governs. 

Here, it is membership to FINRA and FINRA’s rules that dictates. 

{¶31} FINRA’s Code of Arbitration Procedure for Industry Disputes Rule 

13200 states, “Except as otherwise provided in the Code, a dispute must be 

arbitrated under the Code if the dispute arises out of the business activities of a 

member [a broker or dealer admitted to FINRA] or an associated person is between 

or among: Members, Member and Associated Persons; or Associated persons.” 

Two exceptions to mandatory arbitration claims are listed in the code: statutory 

employment discrimination claims, and dispute arising under a whistleblower statute 

that prohibits the use of pre-dispute arbitration agreements. FINRA Rule 13201. 
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{¶32} The parties agree that Montgomery Scott and Hunter Associates are 

both FINRA member firms and McCulloch is an associated person of FINRA. 

Furthermore, the parties agree that the claims are properly before FINRA and that 

they do not fall within the exceptions to arbitration. 

{¶33} Since the parties agree the issues and facts raised were ones that were 

required to be brought before the FINRA arbitrators, the question we must answer is, 

if the arbitrators made errors of fact or law, does this mean the arbitrators exceeded 

their authority or manifestly disregarded the law? 

{¶34} The Second Appellate District has concluded that errors of fact or law 

do not provide a basis for vacating the award: 

 It is because arbitration is a creature of private contract that 

courts must ignore errors of fact or law. See Dayton, 2007-Ohio-1337, 

2007 WL 866999, at ¶ 13, quoting Motor Wheel Corp., 98 Ohio App.3d 

at 52, 647 N.E.2d 844 (“‘The limited scope of judicial review of 

arbitration decisions comes from the fact that arbitration is a creature of 

contract’”). Parties, by agreeing to allow an arbitrator to resolve their 

disputes, also implicitly agree to be bound by the mistakes the arbitrator 

makes while carrying out his charge. See Dayton v. Fraternal Order of 

Police (June 2, 2000), Montgomery App. No. 18158, 2000 WL 706829, 

*3, citing Goodyear, 42 Ohio St.2d at 522, 71 O.O.2d 509, 330 N.E.2d 

703 (“When parties agree to submit their disputes to binding arbitration, 

they agree to accept the result, regardless of its legal or factual 

accuracy”). The comments to R.C. 2711.10, the statute governing 

judicial vacation, explain, “The arbitrators are the sole judges of the law 

and of the evidence and no vacation of an award will be had because of 

their misconstruction of the facts or of the law.” See also Duckett

(quoting the same) and Dayton, 2007-Ohio-1337, 2007 WL 866999, at 

¶ 13, quoting Motor Wheel Corp., 98 Ohio App.3d at 52, 647 N.E.2d 

844 (“If parties cannot rely on the arbitrator's decision (if a court may 

overrule that decision because it perceives factual or legal error in the 
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decision), the parties have lost the benefit of their bargain”). Therefore, 

an error of fact or law alone is not a reason to vacate an award. Huber 

Hts. (“[A]n error of law or fact, * * * [is] insufficient reason[ ] to vacate 

the award”). For example, in Duckett, we reversed a vacation order 

grounded on the trial court's disagreement with the arbitrator's 

understanding of Ohio tort law. Each party had argued in favor of an 

outcome that it believed the law required. “Although these arguments 

present interesting questions of law and fact,” we said, “this Court may 

not reach the merits of this case.” Duckett, 1984 WL 3838, *1. We said 

that the Ohio Supreme Court's conclusion in Goodyear was dispositive 

of the issue: “‘How this or another court might have decided the issue 

presented to the arbitrator is irrelevant; that decision, by voluntary 

contract, was left to arbitration.’” Duckett, 1984 WL 3838, *2, quoting 

Goodyear, 42 Ohio St.2d at 523, 71 O.O.2d 509, 330 N.E.2d 703; see 

also Rathweg Ins. Assoc., Inc. v. First Ins. Agency Corp. (Aug. 18, 

1992), Montgomery App. No. 13184, 1992 WL 206764, *4 (“A court 

cannot go behind the face of an arbitration award to search for an error 

of law or fact”). From Goodyear, we may derive the fundamental 

principle upon which arbitral review restrictions rest: a trial court may 

not substitute its judgment—its view of the facts or law—for that of the 

arbitrator. See Rathweg at *3 (“An award is not reviewable by the 

courts simply because the arbitrators decided the facts incorrectly, 

made an error in judgment, or misapplied the law”). Critically then, in 

reviewing an arbitrator's award, the court must distinguish between an 

arbitrator's act in excess of his powers and an error merely in the way 

the arbitrator executed his powers. The former is grounds to vacate; 

the latter is not. 

Piqua, 185 Ohio App.3d 496 at ¶ 81. 

{¶35} We agree with the above analysis. “Parties who agree to resolve their 

disputes via binding arbitration agree to accept the result, even if the arbitrator's 
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decision is based on factual inaccuracies or the arbitrator's incorrect legal analysis.” 

Hogan, 2008-Ohio-6571 at ¶ 15. 

{¶36} Furthermore, we do not agree with McCulloch and Hunter Associates’ 

assertion that this case presents this court with a situation where more than a 

misapplication of law occurred. Their assertion is based on the claim that raiding and 

tortious inducement of breach of a fiduciary duty in the employer-employee context 

are not cognizable causes of action under Ohio law. In making this argument 

appellants presume that Montgomery Scott is confined to the labels of its claims and 

that Ohio law applies. 

{¶37} Under Ohio procedural law, and more importantly the FINRA rules, only 

notice pleading is required. Civ.R. 8(A); FINRA Rule 13302; Mounts v. Ravotti, 7th 

Dist. No. 07MA182, 2008–Ohio–5045, ¶ 25–26 (the labels used in a particular cause 

of action do not control the nature of that action); Dottore v. Vorys, Sater, Seymour & 

Pease, L.L.P., 8th Dist. No. 98861, 2014-Ohio-25, ¶ 35 (cause of action is 

determined from the “gist of the complaint,” not the label assigned to it by a party). 

The language of the FINRA rule states that the claimant must file with the Director of 

FINRA Dispute Resolution “a statement of claim specifying the relevant facts and 

remedies requested.” FINRA Rule 13302. Consequently, the focus is on what facts 

are pled, not the labels. 

{¶38} This position is best explained by the corporate raiding claim. In the 

statement of claim filed with FINRA under the label raiding, Montgomery Scott 

describes the situation where McCulloch and Hunter Associates allegedly worked 

together to have a large portion of Montgomery Scott’s work force in the Salem office 

quit and go and work for Hunter Associates. This effectively “gutted” the Salem 

office. This theory could be called corporate raiding, employee raiding or employee 

pirating. Ohio case law does not state this theory is or is not a cause of action. 

Regardless of its label, the actions as they are described might fall under Ohio 

causes of action of unfair competition or tortious interference with a business 
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relationship1

, to name a few. However, even if they do not qualify as causes of 

action under Ohio law, that does not mean that the arbitrators exceeded their 

authority or manifestly disregarded the law. 

{¶39} The arbitration agreement does not contain a choice of law clause. 

Likewise, we cannot find anything in the FINRA rules that dictate the choice of law. 

Moreover, there is no separate agreement in the record before us that indicates that 

the parties agreed that Ohio would be the choice of law. Admittedly, the parties do 

cite to Ohio law, however, in the limited record before us of the arbitration 

proceedings, we note that there are citations to case law from, among others, the 

federal courts, California, Ohio, Illinois and Pennsylvania. 

{¶40} Our sister district has explained that an arbitration panel is not bound to 

apply the law of any jurisdiction. Banks v. Jennings, 184 Ohio App.3d 269, 2009-

Ohio-5035, ¶ 16. “Being extra-judicial, an arbitrator is generally free to resolve a 

dispute in a way and for reasons that she alone believes are just, subject only to very 

limited court review.” Id. 

{¶41} Without a choice of law clause, we agree with that statement. That 

reasoning is persuasive, especially when considering, that this is industry arbitration. 

Thus, the panel’s award should be afforded deference because of the specialized 

knowledge that the arbitrators have regarding the industry. It could be equated to an 

administrative agency’s determination. In those cases, we consistently acknowledge 

 1

In Ohio, the tort of interference with business relationships occurs when an individual, without 

privilege to do so, “induces or otherwise purposely causes a third person not to enter into or continue a 

business relation with another.” Reali, Giampetro & Scott v. Soc. Natl. Bank, 133 Ohio App.3d 844, 

852 (7th Dist.1999), quoting A & B–Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades 

Council, 73 Ohio St.3d 1, 14, 651 N.E.2d 1283 (1995). The elements of that cause of action are: “(1) a 

business relationship or contract; (2) the wrongdoer's knowledge of the relationship or contract; (3) the 

wrongdoer's intentional and improper action taken to prevent a contract formation, procure a 

contractual breach, or terminate a business relationship; (4) a lack of privilege; and (5) resulting 

damages.” Elite Designer Homes, Inc. v. Landmark Partners, 9th Dist. No. 22975, 2006–Ohio–4079, 

¶ 31. See also Huffman v. Groff, 4th Dist. No. 10CA54, 2013-Ohio-222, ¶ 41 (“[t]he elements of 

tortious interference with a business relationship are: (1) the existence of a prospective business 

relationship; (2) the wrongdoer's knowledge thereof; (3) an intentional interference causing a breach or 

termination of the relationship; and (4) damages resulting therefrom.” Morrison v. Renner, 5th Dist. 

CT2011–0010, 2011–Ohio–6780, ¶ 21.); Licul v. Swagelok Co., 8th Dist. No. 86322, 2006-Ohio-711, ¶ 

28 (A claim of tortious interference with business relationships requires proof of the following 
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that the agency has expertise in the area, and thus, we afford great deference to the 

agency’s decision. Zidian v. Dept. of Commerce, 7th Dist. No. 11MA39, 2012-Ohio1499, ¶ 48; Turner v. Goldberg, 7th Dist. No. 96CA252, 1999 WL 61050 (Feb. 3, 

1999). The same reasoning can apply here when dealing with security industry 

issues.2 

{¶42} Consequently, considering the above and our limited standard of 

review, the common pleas court correctly confirmed the panel’s award and denied 

the motion for vacatur; and we have no basis to conclude that the arbitrators 

exceeded their authority or manifestly disregarded the law. This assignment of error 

lacks merit. 

Second Assignment of Error

{¶43} “The trial court erred in affirming the award holding Plaintiffs-appellant 

jointly and severally liable for the entire award.” 

{¶44} McCulloch and Hunter Associates claim that they cannot be held jointly 

and severally liable because the only claim that was pled jointly and severally was 

the civil conspiracy claim. They assert that since an underlying wrongful act was not 

proven, there was no basis to find them jointly and severally liable. This assertion is 

based, in part, on the claim that raiding and tortious inducement of breach of fiduciary 

duty in the employer-employee context is not cognizable in Ohio. It was also based 

on the fact that the civil conspiracy claim was the only claim asserted against both 

McCulloch and Hunter Associates. 

{¶45} For the reasons discussed above, this argument fails; the arbitration 

panel was not bound to apply Ohio law and was free to resolve a dispute in a way 

and for reasons that it believed were just. 

{¶46} Furthermore, the entire case was predicated on concerted activity that 

allegedly caused damage to Montgomery Scott. The remedy section of the 

 

elements: “(1) a business relationship, (2) known to the tortfeasor, and (3) an act by the tortfeasor that 

adversely interferes with that relationship, (4) done without privilege and (5) resulting in harm.”). 2

There are two types of arbitrators that FINRA employs – public and non-public arbitrators. 

http://www.finra.org. Public arbitrators are not required to have knowledge of the securities industry, 
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statement of the claim asks for any relief that the arbitrators deem just and seeks 

damages from both McCulloch and Hunter Associates. Thus, there was a basis to 

order joint and several liability. Therefore, for those reasons, this assignment of error 

lacks merit. 

Conclusion

{¶47} In conclusion, the judgment of the common pleas court to confirm the 

arbitration panel’s award and deny McCulloch and Hunter Associates’ motion to 

vacate is hereby affirmed. The cause is not moot and the arbitrators neither 

exceeded their authority nor manifestly disregarded the law. 

Donofrio, J., concurs. 

DeGenaro, P.J., concurs. 

 while non-public arbitrators have a more extensive security industry background. Id. One of the 

arbitrators in this panel is a non-public arbitrator having a security industry background.